TRIBUNAL TAX REPORTS (ITR (TRIB)) Volume 17 : Part 4 (Issue dated : 30-07-2012)

ITR’S TRIBUNAL TAX REPORTS (ITR (TRIB))

Volume 17 : Part 4 (Issue dated : 30-07-2012)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

Appeal --Additional evidence--Commissioner (Appeals) admitting new evidence after considering facts and circumstances of case in entirety and validly--Justified--Income-tax Rules, 1962, r. 46A-- ITO v. Bhagwan Dass (Chandigarh) . . . 446

Business expenditure --Capital or revenue expenditure--Assessee running tutorial institution--Purchase of books for use by students for professional entrance examinations--Is capital expenditure--Depreciation to be allowed at 60 per cent.--Income-tax Act, 1961, ss. 32, 37-- Brilliant Study Centre v. Asst. CIT (Cochin) . . . 394

----Cost of books and awards--Assessee failing to produce vouchers of purchase of books--Expenditure to be disallowed--Assessee to furnish details regarding expenditure on awards--Matter remanded--Income-tax Act, 1961-- Brilliant Study Centre v. Asst. CIT (Cochin) . . . 394

----Demurrage charges paid to railways--Assessee furnishing certificate regarding nature of demurrage--Deduction allowable--Income-tax Act, 1961-- ITO v. Bhagwan Dass (Chandigarh) . . . 446

----Disallowance--Payments in cash exceeding specified limit--Finding that single transactions made to appear as multiple transactions--Payments to be disallowed--Income-tax Act, 1961, s. 40A(3)-- Brilliant Study Centre v. Asst. CIT (Cochin) . . . 394

----Interest on borrowed capital--Interest-free advances--Direction to disallow interest at same rate charged by bank from assessee--Justified--Income-tax Act, 1961-- ITO v. Bhagwan Dass (Chandigarh) . . . 446

Business income --Remission or cessation of trading liability--Addition--Unclaimed liabilities--No record of any remission or cessation of trading liability--Addition to be deleted--Income-tax Act, 1961, s. 41(1)-- Dy. CIT v. Bax Global India P. Ltd. (Delhi) . . . 414

Capital gains --Computation--Sale of land--Valuation by stamp valuation authority applied--Fair market value lower than value adopted by stamp duty authority--Direction to adopt fair market value--Justified--Income-tax Act, 1961, s. 50C-- ITO v. Gita Roy (Kolkata) . . . 431

Cash credits --Assessee producing details and creditor confirming loan granted to assessee--Addition to be deleted--Income-tax Act, 1961, s. 68-- ITO v. Bhagwan Dass (Chandigarh) . . . 446

Company --Dividend--Deemed dividend--Advance to shareholder--Advance to company in which shareholder had substantial interest--Section 2(22)(e) not applicable--Amount not assessable as deemed dividend--Income-tax Act, 1961, s. 2(22)(e)-- Asst. CIT v. Color Crafts P. Ltd. (Chandigarh) . . . 419

Depreciation --Assets given on financial lease--Assessing Officer to determine nature of lease--Different yardstick cannot be adopted for allowing depreciation and taxing lease rent--Matter remanded--Income-tax Act, 1961, s. 32-- Dy. CIT v. Bax Global India P. Ltd. (Delhi) . . . 414

Double taxation avoidance --Non-resident--Permanent establishment--Exact period of continuation of activities in India to be ascertained--Matter remanded--Double Taxation Avoidance Agreement between India and Mauritius, art. 5(1), (2)(i)-- GIL Mauritius Holdings Ltd. v. Assistant Director of Income-tax (International Taxation) (Delhi) . . . 491

Income --Business income--Remission of liability--Bank--Amount transferred from inter-branch transaction blocked accounts to reserves through profit and loss account--Transfer permitted by Reserve Bank of India subject to conditions that claim in respect of entries should be honoured and amount should not be used for declaration of dividends--Amount not of revenue nature to begin with--Amount not assessable under section 41(1)--Income-tax Act, 1961, s. 41(1)-- Punjab National Bank v. Addl. CIT (Delhi) . . . 462

Income from undisclosed sources --Unexplained sales and expenditure--Addition based on statement of director recorded by Central excise authorities--Addition not supported by evidence--Additions not valid--Income-tax Act, 1961-- Asst. CIT v. A. K. Alloys P. Ltd. (Chandigarh) . . . 424

Interpretation of taxing statutes --Interpretation beneficial to assessee--Principle applicable to non-residents-- Deputy Director of Income-tax (International Taxation) v. Solid Works Corporation (Mumbai) . . . 510

Loss --Set off--Loss on share transactions--Actual delivery received by agent of assessee--Loss not speculation loss--Commissioner (Appeals) allowing set off of loss against other heads of income--Justified--Income-tax Act, 1961, s. 43(5)-- Dy. CIT v. Dr. S. Thilagavathy (Chennai) . . . 506

Non-resident --Income deemed to accrue or arise in India--Double taxation avoidance--Assessee providing various hotel related services to hotels across the world--Assessee having no permanent establishment in India--Payments received not royalty or fees for technical services--Income-tax Act, 1961, s. 9(1)(vii), Explanation 2 --Double Taxation Avoidance Agreement between India and the U. S. A, art. 7-- Deputy Director of Income-tax (International Taxation) v. Sheraton International Inc. (Delhi) . . . 457

----Royalty--Payment from re-sellers on sale of shrink wrap software--Not royalty but business income--Non-resident not having permanent establishment in India--Income not assessable in India--Income-tax Act, 1961, s. 9--Double Taxation Avoidance Agreement between India and the U. S. A., art. 12(3)-- Deputy Director of Income-tax (International Taxation) v. Solid Works Corporation (Mumbai) . . . 510

Revision --Powers of Commissioner--No tax effect--Order cannot be revised--Income-tax Act, 1961, s. 263-- Punjab Wool Syndicate v. ITO (Chandigarh) . . . 439

Unexplained income --Unexplained credit entries in capital account--Assessee furnishing details of remittance--Addition to be deleted--Income-tax Act, 1961-- ITO v. Bhagwan Dass (Chandigarh) . . . 446

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Double Taxation Avoidance Agreement between India and Mauritius :

Art. 5(1), (2)(i) --Double taxation avoidance--Non-resident--Permanent establishment--Exact period of continuation of activities in India to be ascertained--Matter remanded-- GIL Mauritius Holdings Ltd. v. Assistant Director of Income-tax (International Taxation) (Delhi) . . . 491

Double Taxation Avoidance Agreement between India and the U. S. A :

Art. 7 --Non-resident--Income deemed to accrue or arise in India--Double taxation avoidance--Assessee providing various hotel related services to hotels across the world--Assessee having no permanent establishment in India--Payments received not royalty or fees for technical services-- Deputy Director of Income-tax (International Taxation) v. Sheraton International Inc. (Delhi) . . . 457

Art. 12(3) --Non-resident--Royalty--Payment from re-sellers on sale of shrink wrap software--Not royalty but business income--Non-resident not having permanent establishment in India--Income not assessable in India-- Deputy Director of Income-tax (International Taxation) v. Solid Works Corporation (Mumbai) . . . 510

Income-tax Act, 1961 :

S. 2(22)(e) --Company--Dividend--Deemed dividend--Advance to shareholder--Advance to company in which shareholder had substantial interest--Section 2(22)(e) not applicable--Amount not assessable as deemed dividend-- Asst. CIT v. Color Crafts P. Ltd. (Chandigarh) . . . 419

S. 9 --Non-resident--Royalty--Payment from re-sellers on sale of shrink wrap software--Not royalty but business income--Non-resident not having permanent establishment in India--Income not assessable in India-- Deputy Director of Income-tax (International Taxation) v. Solid Works Corporation (Mumbai) . . . 510

S. 9(1)(vii), Explanation 2 --Non-resident--Income deemed to accrue or arise in India--Double taxation avoidance--Assessee providing various hotel related services to hotels across the world--Assessee having no permanent establishment in India--Payments received not royalty or fees for technical services-- Deputy Director of Income-tax (International Taxation) v. Sheraton International Inc. (Delhi) . . . 457

S. 32 --Depreciation--Assets given on financial lease--Assessing Officer to determine nature of lease--Different yardstick cannot be adopted for allowing depreciation and taxing lease rent--Matter remanded-- Dy. CIT v. Bax Global India P. Ltd. (Delhi) . . . 414

----Business expenditure--Capital or revenue expenditure--Assessee running tutorial institution--Purchase of books for use by students for professional entrance examinations--Is capital expenditure--Depreciation to be allowed at 60 per cent.-- Brilliant Study Centre v. Asst. CIT (Cochin) . . . 394

S. 37 --Business expenditure--Capital or revenue expenditure--Assessee running tutorial institution--Purchase of books for use by students for professional entrance examinations--Is capital expenditure--Depreciation to be allowed at 60 per cent.-- Brilliant Study Centre v. Asst. CIT (Cochin) . . . 394

S. 40A(3) --Business expenditure--Disallowance--Payments in cash exceeding specified limit--Finding that single transactions made to appear as multiple transactions--Payments to be disallowed-- Brilliant Study Centre v. Asst. CIT (Cochin) . . . 394

S. 41(1) --Business income--Remission or cessation of trading liability--Addition--Unclaimed liabilities--No record of any remission or cessation of trading liability--Addition to be deleted-- Dy. CIT v. Bax Global India P. Ltd. (Delhi) . . . 414

----Income--Business income--Remission of liability--Bank--Amount transferred from inter-branch transaction blocked accounts to reserves through profit and loss account--Transfer permitted by Reserve Bank of India subject to conditions that claim in respect of entries should be honoured and amount should not be used for declaration of dividends--Amount not of revenue nature to begin with--Amount not assessable under section 41(1)-- Punjab National Bank v. Addl. CIT (Delhi) . . . 462

S. 43(5) --Loss--Set off--Loss on share transactions--Actual delivery received by agent of assessee--Loss not speculation loss--Commissioner (Appeals) allowing set off of loss against other heads of income--Justified-- Dy. CIT v. Dr. S. Thilagavathy (Chennai) . . . 506

S. 50C --Capital gains--Computation--Sale of land--Valuation by stamp valuation authority applied--Fair market value lower than value adopted by stamp duty authority--Direction to adopt fair market value--Justified-- ITO v. Gita Roy (Kolkata) . . . 431

S. 68 --Cash credits--Assessee producing details and creditor confirming loan granted to assessee--Addition to be deleted-- ITO v. Bhagwan Dass (Chandigarh) . . . 446

S. 263 --Revision--Powers of Commissioner--No tax effect--Order cannot be revised-- Punjab Wool Syndicate v. ITO (Chandigarh) . . . 439

Income-tax Rules, 1962 :

R. 46A --Appeal--Additional evidence--Commissioner (Appeals) admitting new evidence after considering facts and circumstances of case in entirety and validly--Justified-- ITO v. Bhagwan Dass (Chandigarh) . . . 446